When it was opened on July 10 2008, exactly 10 years ago today, it started out with just 500 apps. Unimaginable today, it started very small and yet it was a very inspiring backdrop and integral part of my professional life over the last 10 years.

WWDC 2009 – Apps Wall

Just one year later at WWDC 2009 more than 50,000 apps were available. At the conference Apple put up a wall of 30″ Cinema Displays (arguably one of the most amazing monitors ever build) and created a wall of apps, showing off all apps that were currently on the app store. As I joined the platform almost instantly after becoming available to developers in Germany, I was happy to see some of my apps on the wall (circled in red in the photo).

Over the years I published 100+ apps, both as a individual developer or as a responsible manager while working in advertising and publishing. With applications ranging from promotional marketing apps, utilities, news and upscale magazine products to travel guides, social networking apps as well as environmental citizen science projects and educational games, I gathered in-depth insights into the app store economy over the course of the last decade.

Number of apps available on App Store from 2008 – 2017 – Source: Statista

To put this in perspective, the App Store belongs to Apple’s service business, which is among the fastest growing segments of revenue for Apple. While it might seem tiny compared to the iPhone category, it is larger than the iPad business and the “other” category which consists of Apple TV, Apple Watch and Beats. Despite indications that the App Store growth might be stagnating or trends are moving away from apps towards smart speakers etc., it is pretty clear that Apple has created not only an amazing ecosystem that includes the iPad, Apple TV and the Apple Watch, it is a very vibrant and apparently highly profitable industry to be in.

So, what’s next?

At the recent World Wide Developer Conference (WWDC 2018) Apple announced iOS 12 with overall performance improvements and new features such as group FaceTime, Memojis, ARKit 2, Siri shortcuts as well as a new design of Notification Center and new privacy settings. Among the many new things, I especially appreciate Screen Time, a new feature allowing users to track and better understand their iPhone usage. As discussed before, I am convinced that spending less time or at least more conscious time glued to a screen would be highly beneficial.

Among the many other things that I found interesting on a more technical level, I most appreciate Create ML for Core ML 2, a simple to use tool chain to create and train machine learning models on the Mac using Swift and Xcode. Having worked with Core ML on previous projects, I am looking forward to experimenting with it. Also the Wall of Apps during the WWDC keynote was pretty impressive and surely evolved from the 2009 edition.

WWDC 2018 Apps Wall

After 10 years the iOS platform is striving more than ever within its ecosystem of MacOS, WatchOS and tvOS. With more options for cross-platform application development coming in 2019, developers will be able to offer their apps on both desktop and mobile platforms much more easily. Apple categorically denied rumours to integrate macOS and iOS for obvious reasons and instead announced plans to integrate iOS’s UIKit framework into macOS in addition to the existing AppKit framework used on the Mac. The system apps News, Stocks, Voice Memos and Home debut in macOS Mojave during WWDC indicate how cross-platform apps might look like.

With a year-to-year growth of 30% from 2017 to 2018 in consumer spendings on mobile application stores combined, an industry report by App Annie suggest an estimated growth of 13.9 % from 2017-2022 with speedings of $ 156.47 billion worldwide in 2022. In 2018 alone, the report expects spendings of $ 53 billion on the iOS App Store with China, USA, Japan, South Korea and Germany ranking top 5 by consumer spendings. Also, despite Android outperforming the iOS ecosystem in terms of downloads, iOS is still responsible for 2x as much revenues, unquestionably remaining the most profitable ecosystem. So it’s save to say, the app economy will remain strong for the foreseeable future.

DISCLAIMER: In 2017/2018 I was part of the master class at the Apple Developer Academy, the first program of its kind worldwide with a select group of around 30 people. The Apple Developer Academy is a collaboration between the University of Naples Federico II and Apple Inc. Utilising Challenge-based learning (CBL) as a methodology framework, the program focusses on software engineering, design and business creation with an emphasis on interdisciplinary collaboration and technology driven creativity.

The average artist’s yearly earnings from art practice is estimated at less than $10,000 US dollars. In the wake of widespread public defunding of the arts, there is mounting pressure on artists and galleries to “innovate or die”. Emerging from this crisis is the seductive but problematic image of the Artist Entrepreneur, a creative entropic force, leveraging the tools of startup culture and capital to self-disrupt and innovate new models of artistic production. Should artists embrace, subvert or actively resist this new identity? What does it risk?

To find out, a group of artists will join forces with Famous New Media artist Jeremy Bailey in a one month residency at PRAKSIS in Oslo this summer. This group of revolutionaries will collectively define new manifestos for artists working in this era of increased uncertainty. Nothing less than the future of art is at stake.”

As part of the 1 month residency program based in Oslo and offered by UKS and The Moving Museum, I will once again assist artists from all over the world to understand the foundations and underlying mechanics of the startup economy and shed some light on business model design and high-growth venture financing as well as international entrepreneurial subsidy systems.

During A/D/A Hamburg I joined new media artist Jeremy Bailey as a mentor for his 3 day Lean Artist seed accelerator workshop. It basically was a boot camp based on design thinking and lean startup principles to create culturally disruptive startups.

On the first day I joined the selected group of 10 international artists with a cynical review of the worldwide startup economy to promote a more creative approach to generating relevant startup ideas. Jeremy kicked the event off with an accelerated design thinking workshop to generate needs and insights for problem statements. Over the course of 3 days the cohort created startup ideas and iterated product prototypes and pitched their artistic business ideas for additional funding on the last day.

The first cohort will start August 26-28 2016 as is part of the A/D/A Hamburg 2016, a conference about future utopias for today’s urban citizen. I was asked to join the cohort as a mentor, so I am looking forward to the event and can’t wait to see what the artists come up with.

The workshop was organised around the structure of typical startup accelerator programs, working on specific challenges while developing a working business model over a period of 12 weeks. It was a 5 person team with local ties in Australia, Denmark, Germany, Spain and the U.S. and backgrounds in engineering, marketing, business and process management.

The team utilized design thinking methodologies, experimented with real life feedback and consulted with industry mentors. While defining and differentiating the product, support and feedback on topics such as design, financials, financing, valuations, growth, IP and pitching to investors was provided by UNSW staff and additional industry professionals.

Business Model Canvas

Key element of the 12 week program was the business model canvas, a strategic management template for developing and documenting business models. It helped the team to visually describe all important elements and to iterate through various versions of the business model while working through the Build-Measure-Learn feedback loop. Also it allowed to sketch and discuss the business model on paper within the group, which made it very easy to discover flaws and potentials for further improvements.

THE BUSINESS MODEL CANVAS by strategyzer.com

As could be expected, the business model changed from week to week and many apparent problems were eliminated through validated learning and evidence based iteration. By getting user feedback as early as possible and accounting for every change made to the business model, waste of funds while developing the minimum viable product was minimized as much as possible.

Fantastic Five – B2B Breakfast Delivery Service

In week 12 the team pitched the state of the startup, its business model, go to market strategy, key metrics and financial projections to real investors within the local startup scene in Sydney and was offered to talk about possibly joining food delivery startup activities currently active at a local accelerator program in Sydney.

Fantastic Five

The pitch was presented during a demo day at the Michael Crouch Innovation Centre within a lineup of several other startups with a pitch deck of 1o slides in a time slot of 3 minutes with an additional 3 minutes for questions by the potential investors. The jury was made up by prominent members and angel investors of the Sydney startup community.

How much time and money does it take to start a new venture?

All in all, it was a very interesting experience. Considering the effort put into the project one can only imagine the results if one would be committed full time. I spent roughly half a day to a day per week on this project and expect the other team members to have been involved in a similar or slightly deeper manner.

So basically the business pitched to the investors was the product of 250-500 hours of work with no significant additional budget. All templates and tools used were free and everything surrounding the actual product was designed, developed and tested by the team members.

So as all of you know, it just takes a lot of effort and the willingness to put in the time to ideate something of value. It certainly is feasible to create a venture with high-growth potential within a matter of 3 months. In fact, considering the experience of this workshop, it might be possible to do it a lot quicker if the commitment and skill set of the team members match up.

This essay will elaborate on recent changes in the social media landscape, specifically changes in social traffic referrals and the persistence of social media, and their subsequent implications for digital business models of newspaper publishers. Taking into consideration that social referral traffic is becoming the main source of referral traffic for many media and news publishers, changes in the persistence of social media have the potential to largely compromise the publisher’s efforts to monetise their web traffic through advertising.

A definition of social media

In order to classify changes in the social media landscape it is sensible to define the term for the current state of its development. For the purpose of this essay this can be done without illustrating the historical evolution of aspects, features and characteristics. Since social media have changed drastically over the past years, many attempts of defining the term have been made. Due to the ever-changing landscape and the rapid technological development of social media, many of these definitions seem out of date or imprecise. For the purpose of this essay the definition by Carr and Hayes (2015) will be used, since it provides an accessible explication for the long-term future, considers recent changes in technology, interaction and organisation as well as anticipates future challenges in social media. They define social media as follows:

“Social media are internet-based channels that allow users to opportunistically interact and selectively self-present, either in real-time or asynchronously, with both broad and narrow audiences who derive value from user-generated content and the perception of interaction with others.”

(Carr C T and Hayes R A, 2015)

This definition allows to include a wide variety of services, ranging from obvious social networking sites such as Facebook and Twitter, business networking sites such as LinkedIn, video sharing sites such as Youtube and Vimeo to live streaming services such as Twitter’s Periscope as well as old and new messaging services such as WhatsApp and Snapchat among many others. It also allows for future social media services to be included, as long as they are user-centric and interactive channels organised around content sharing, characteristics that are shared among all social media channels to date.

Changes in social referral traffic

One industry relying heavily on shared social media content is the media and newspaper publishing industry. Newspaper websites are largely monetised through advertising and rely on visits and page impressions on their actual web property (Ju, Jeong and Chyi, 2014). The sources for such website traffic can ruffly be divided among direct traffic (users accessing the website directly by entering the url in the browser) and referral traffic (users accessing the website through search engine results such as in Google or through a link on another web property or within social networks). Every user visiting a publisher’s usually free to use website generates page views while accessing different resources on the web property. With every page load advertising inventory will be displayed for the user to generate advertising revenue for the publisher. In conclusion publishers’ digital business models rely heavily on page views and ad impressions to monetise their inventory.

Over the past years the importance of social referral traffic for media and newspaper websites has changed dramatically. In August 2015 it was reported by FORTUNE that traffic analytics firm Parse.ly’s data showed social media as the largest provider of all website referral traffic with about 43% of the total traffic, while search traffic through Google accounted for just 38% (Figure 1). Facebook is by far the largest provider of social referral traffic in this dataset with close to 40%.

To emphasise the dramatic trajectory of this change, Facebook’s share grew rapidly from just 20% in January 2014 (Figure 2). For larger news and media sites, more than 50% are reported to get more traffic from Facebook than from Google (Ingram, 2015). This development could very well be considered a tipping point for the dominance of Facebook as the main source for news content on the internet.

Figure 1 – Top Traffic Referral Source May – July 2015

Figure 2 – Parse.ly Network Traffic from Google Versus Facebook

With social referral traffic accounting for such a large portion of traffic for major news and media websites, it is clear that the monetisation of this traffic is crucial for the publishers’ business model. Unfortunately for publishers, recent research by Ju, Jeong and Chyi (2014) showed that users accessing news websites via social networking sites provide fewer page views and higher bounce rates than other website visitors. The authors examined 66 U.S. newspapers’ efforts to distribute their content via social networking sites such as Facebook and Twitter and the effectiveness of these services as news platforms. The social media presences of the newspapers were analysed and the impact to the newspaper’s website traffic and therefore their advertising revenues examined.

The results of the efforts to drive social referral traffic have proven to be largely underwhelming, despite the hype about the business potential for newspapers (Ju, Jeong and Chyi, 2014). The research clearly illustrates the limitations of creating new advertising revenue streams through social referral traffic for newspapers. With an increasing number of visitors being referred through social media, the average page impressions per visit are shrinking on publishers’ web properties. This development has direct impact on the publishers’ ability to monetise their web traffic and is consequently accelerating at the same pace as the amount of social media referral traffic is increasing.

Changes in the persistence of social media

An important element of social media has been the persistence of content, may it be used in real-time as in Twitter’s Periscope or asynchronously as in WhatsApp. For many years it has been a crucial aspect that any content within the social media landscape remains persistent (Dewing, 2012), meaning accessible and searchable via the web for ever, even if the users’ practice focuses more on the shared present (Hogan B and Quan- Haase A, 2010).

Although the persistent element is still existent in lots of social media channels, recent services like Snapchat introduced channels which delete content shortly after consuming it (Carr C T and Hayes R A, 2015). There are more and more new services focussing on the “present moment” and deleting content after its consumption, e.g. Beme, Tiiny, Vine or Wickr, to name a few.

In conclusion non-persistent content is already an established element of the social media landscape at this stage. The result of content not being accessible after the “present moment” has direct implications for publishers’ business models relying on monetising of shared and long-term accessible social media content.

As the longevity of social media news shortens dramatically by recent shifts in persistence within social networks, meaning content being accessible and shareable for shorter periods of time, the time to generate social referral traffic for news sites is getting shorter as well. The long tail effect (Andersen, 2004) for news articles in this category may be diminished completely if the content is no longer persistent within the social media landscape. With social referral traffic only being generated on a short term basis, a large portion of monetisation potential is lost for older news articles. This increases the pressure on publishers to refinance their articles on a short term dramatically.

Things might get even worse for many publishers with Facebook’s latest publishing feature, Instant Articles. Instant Articles allow publishers to display content in its entirety directly within the Facebook stream (Groden, 2016). The user does not have to leave the Facebook platform and can consume an entire article, including videos and interactive elements, seamlessly within the Facebook experience.

Although this makes sense from a user’s perspective, it increases the publishers’ dependency on Facebook drastically. With Instant Articles the amount of off-website content and with it the difficulty to monetise this content is increasing. Publishers may sell their own advertisement for Instant Articles but in the end Facebook is in charge of the platform (McAlone, 2016), a drastic difference from the publishers’ own web properties. As well as it may be a chance for smaller publishers with no large sales force in place to use Facebook’s ad sales in Instant Articles, it may just as well be a huge problem for larger media and news publishers.

With these developments in mind, many publishers would have to change their social media strategy drastically if they decide to change their business model from free websites with advertising revenues towards closed websites with paywalls. Since news content tends to be free within the social media landscape and certainly will remain free within Facebook Instant Articles for the time being, it is doubtful that publishers can drive many users into their paywalls through social referral traffic.

Especially with content being integrated in platforms like Facebook in better ways, the lock-in effect for most users is increasing. This development makes it more and more unlikely that users are willing to tolerate a disruption in an otherwise seamless social media experience just to consume content elsewhere, not even considering paying for it.

Conclusion

Summarised it can be stated that social referral traffic in general is worse for media and news publishing websites than other kinds of traffic and leads to fewer page views and higher bounce rates. This leads to a direct threat to advertising revenues for most publishers as the percentage of social referral traffic increases. As a result the current business model of many media and news outlets is in jeopardy.

With recent changes in the percentage of social referral traffic as well as in the persistence of social media content, the pressure on publishing companies to find alternative ways to monetise their inventory increases rapidly. If content is no longer available within social media after it has been consumed in the “present moment”, the potential to drive traffic with this content is very limited and short-term.

Additionally with Facebook latest publishing feature, Instant Articles, many users are kept out of the publishers’ web properties. Therefor it seems unlikely that the quality of social referral traffic, meaning its page views per visit ratio, is increasing for publishers’ any time soon.

Taking into consideration the rapid growth of the percentage of social referral traffic over the past year, it is clear that the pressure is increasing for many media and news publisher with no deceleration of this trend in sight.

Lastly, publishers’ actual or conceivable efforts to erect paywalls for compensation of underperforming advertising revenues on their websites might be compromised by new publishing features such as Facebook’s Instant Articles, which largely contribute to keeping users within the social network and off third party web properties.

Since the illustrated parameters have a tremendous effect on the bottom line for news websites and tend to change very quickly, it is more important than ever for publishing companies to act swiftly if they want to avoid impairing their market position any further.

Unfortunately, all attempts as of today do not seem to provide evidence for any extensive success. Therefor a prosperous step into the future requires rapid and substantial business model innovation.

tl;dr

Due to recent changes in social referral traffic to news websites and in the persistence of social media, current business models of digital news publishers are in jeopardy.

DISCLAIMER:This essay has been written for the seminar “Online and Mobile Media” during an international research exchange at the University of New South Wales (UNSW) in Sydney, Australia, within the “Next Media” master program at the University of Applied Sciences Hamburg (HAW Hamburg) in 2016. For more information or any questions please contact me at mail@moritzrecke.com.

Apart from some very few media corporations such as The New York Times, who experimented with VR with a specific mobile application, most publishing companies have not yet committed to the VR trend. In fact many publishers still seem to struggle with the transition from print to digital media. Not only are they struggling to establish working business models for their websites, they also seem to be behind on the shift to mobile media as well.

With the ongoing acceleration of the technological revolution this is yet another reason to worry about the media and news industry in general. If these companies keep moving at an old economy pace, it is doubtful they can keep up with current developments. The next big thing might be around the corner even before they start to adapt to then already outdated technologies.

No matter if they are trying to protect their current business as long as possible or if they are just afraid of the future, there is no time to wait any longer. Since the exponential acceleration of the technological development is a fact, publishers should start facing the digital future without fear if they want to survive.

DISCLAIMER:This post has been written for the seminar “Online and Mobile Media” during an international research exchange at the University of New South Wales (UNSW) in Sydney, Australia, within the “Next Media” master program at the University of Applied Sciences Hamburg (HAW Hamburg) in 2016. For more information or any questions please contact me at mail@moritzrecke.com.

There were 34,522 complaints called in to 311 between September 8 and September 15, 2010. Here are the most common, plotted by time of day. Illustration: Pitch Interactive

Recently I wrote about data-driven journalism and whether it is worth the effort in regards to their monetisation potential for publishing companies. Although there are definitely great and interesting stories to be told with large data sets, it seems unlikely that the immense costs involved in the process of creating these stories can be justified within the current framework of digital business models within the publishing industry.

Still many data-driven stories and corresponding data visualisations seem interesting (e.g. in form of infographics) or even insanely beautiful (e.g. in form of maps or graphs). There is one problem with some kind of data visualisations in terms of storytelling though: they tell no story.

Consider the prominent visualisations of the 311 calls in the city of New York for instance. Although immensely beautiful and acknowledged by design experts around the globe, it’s hard to find any substantial story within the data or its visualisations. As shown above a plot of 311 calls by time of day with different colors for different types of complaints surely leads to a beautiful image, but there is no real story behind it.

The facts that there are more calls during the day, complaints about street condition seem to drop during the night and noise complaints are on the rise during the evening are hardly surprising. Even if these calls are plotted on a map, an attempt also explored with the 311 data, things do not get more interesting.

DISCLAIMER:This post has been written for the seminar “Online and Mobile Media” during an international research exchange at the University of New South Wales (UNSW) in Sydney, Australia, within the “Next Media” master program at the University of Applied Sciences Hamburg (HAW Hamburg) in 2016. For more information or any questions please contact me at mail@moritzrecke.com.

Data-driven Journalism is grounded in calls for open access to information and transparency and has strong links government related open data initiatives, making public data available in standardised and open formats. It aims at the process of filtering data and telling new and interesting stories with conditioned data sets rather than just using the data as a source.

The most prominent example of data-driven journalism is the case of The Guardian and Wikileaks, where data has been transformed into interactive visualisations to allow a exploration of the data by the user itself.

It is clear by the amount of data alone, that these interactive visualisations can not be created manually. They need to be created with designers and developers working hand in hand, automating data processing and filtering to allow for the story to be explored by the user. This is a complete game changer for most news publishing corporations who traditionally had only journalists and maybe illustrators or photographers telling stories.

Ever since data-driven journalism became a mainstream element for many major stories, the newsroom process became much more technical and complex. This has also risen the cost for the newsroom staff to create the content for the publisher’s website. Since developers are in high demand all around the world, it is safe to assume that the costs for publisher’s grew substantially in this regard.

Considering the difficulties most publishers have to monetise their digital efforts successfully, it is doubtful that expensive data-driven stories will be able to compensate for that. As desirable as great stories such as the Wikileaks example might be, it is hard to find evidence that it is helping publishing companies to find new and working business models on the internet.

DISCLAIMER:This post has been written for the seminar “Online and Mobile Media” during an international research exchange at the University of New South Wales (UNSW) in Sydney, Australia, within the “Next Media” master program at the University of Applied Sciences Hamburg (HAW Hamburg) in 2016. For more information or any questions please contact me at mail@moritzrecke.com.

In its Q1 2016 earnings report, Facebook stated a user base of 1,65 billion monthly users with accelerating growth. This does not even include the 1 billion WhatsApp and 900 Million Facebook Messenger or the 400 Million Instagram users. Undoubtably it is the largest ecosystem of social communities to date. Not only does everyone use Facebook, everyone consumes media content and news through Facebook’s social media channels.

Ever since the emergence of web 2.0 and social networks the focus around content shifted towards communication about the content rather than anything else. Content needs to be social, meaning likeable, shareable and discussable. All these elements add large portions of user generated content to the mix. Since most of this is happening in the social network space, it further degrades the reach of classical digital media and news outlets. Since most people are “using” the content within a social context, most of the usage is happening within social networks. It is very doubtful that any news outlet (or any other social network such as twitter) will be able to keep up with the pace of development at Facebook.

This is probably why Facebook Instant Articles is such a success. It basically allows written content to be viewed in its entirety without even leaving Facebook. Not only does this add to the already immense lock-in effect of the Facebook platform, it feels more natural to users than to disrupt the Facebook experience and load a new website with tons of ads and.

Legacy media had to deal with an increasing variety of new outlets that aggregate and distribute content across all available platforms with blurry lines between them for quite some time now. Before, most of these services linked back to the publisher’s source for the content. With Facebook Articles these days are numbered. And since this feels very natural for the user, it can be expected to become the dominant way to consume news. So once again, publishers need to figure out how to monetise their work within this new format since their web traffic is unlikely to increase.

Only when considering video, there might be a way around Facebook for the time being. Youtube is still the largest video site and also the second largest search engine after Google. But Facebook is working on that as well. Just recently they launched Live Video, a service comparable to Twitter’s Periscope or Youtube’s live streaming service, and they continue to improve their overall video capabilities. And as we all know by now, Facebook is definitely pioneering the VR space with Oculus Rift, wherever it might lead for the media and news industry.

DISCLAIMER:This post has been written for the seminar “Online and Mobile Media” during an international research exchange at the University of New South Wales (UNSW) in Sydney, Australia, within the “Next Media” master program at the University of Applied Sciences Hamburg (HAW Hamburg) in 2016. For more information or any questions please contact me at mail@moritzrecke.com.